I also don't buy the idea that eliminating handouts wouldn't make any difference. This woman is living somewhere and eating. Unless she's got a paying job we haven't heard about, and is buying herself food and paying rent, then she's living on the dole. Without it, she would either have to clean up or starve to death.
This woman is a difficult case, but it seems that she should have been locked up long ago.
Simple, conservative solution.
She may not be on the dole. Could bwell e surviving by "selling her body".